Any small business owner knows how it feels to live for their business, especially if they also rely on it in order to support their family. If you own a small business, how will it fare if you suddenly became ill or injured – rendering you unable to work anymore? As the business head, you need to tackle the what-ifs life may bring your way. Your loved ones may not have the desire or skill to support your business. What if it’s your co-owner who becomes permanently disabled and you’re the one who’s left behind to make huge decisions?

This is where a disability buy-sell plan comes in. A disability buy-sell plan is an agreement between business owners to buy out their co-owner’s business share in unfortunate scenarios, such as a permanent disability. Sogo Wealth Management and Risk Management in San Antonio has listed options on how you can fund this type of agreement.

  • Cash method – In this option, a business owner can collect enough money to buy the business interest in the event of an owner’s disability. The downside of this is that it may take years before you can save the necessary funds.
  • Current earning installment method – In this option, you can pay the purchase price in installments. The downside of this is that you can drain your business income for years until you pay the price in full. If you’re the disabled owner, the payments you will receive would be highly dependent on the business’s future performance.
  • Loan method – You may borrow the purchase price with interest, assuming that you can obtain a business loan after the owner’s disability.
  • Insured method – A disability buy-out insurance can ensure that you will have the cash to complete the purchase price – either in a single sum or installment purchases. Assuming that your business has been accurately valued, you will have exactly what your business needs.

Learn more about how you can protect all the aspects of your business by contacting SOGO Wealth Management and Risk Management in San Antonio, Texas.

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